China's Union Strategy at the Crossroads

Abstract

So far, China has been a success story in economic development and in attracting foreign investment. But China has reached the stage where labor unrest can threaten to derail the path of continuous industrial development. In a capitalist society, labor disputes are common and generally the disputes can be settled with or without a strike. But the Chinese economy is based on capitalism in a socialist setting where a political party has the sole right of governing the country. Today, the situation in China is intriguing, to say the least. To the workers, the unions in China are state-controlled. The state unions suppress wages and workers' right in order to attract foreign investment to expand GDP. On the other hand, foreign rms do not like unions to be set up for fear that the unions will give Chinese employees the power to slow down or disrupt their operations and increase the cost of operation. Who is right? How should China move forward in its strategy with regard to the labor movement? It is a fact that the labor unions in the West are not what the Chinese government can tolerate. Their experience is also neither relevant nor useful to China. However, Singapore's experience with having a strong labor union under which labor disputes which can be contained and settled very quickly may be relevant. The main conclusion of this paper is that Singapore's style of industrial relations under which a strong union can work with the government to maintain full employment and to contain labor disputes may China Economic Policy Review Vol. 3, No. 1 (2014) 1450005 (16 pages) °c World Scienti c Publishing Company DOI: 10.1142/S1793969014500058